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Tutorial |
  
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Tutorial |
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It is recommended that setting up e-PayDay® should be approached in the following order.
We also recommend that a backup be created after completing the setting-up but before the first payrun is done.
1. Company Information
2. Awards
3. Pay Types
4. Super Mgr
5. Employee Information
The reason for this is that when adding an employee, you will need to link them to an award and super fund, etc.
COMPANY INFORMATION
The information in this area will most likely be addressed only once; i.e. such as in the setting up stage.
One by one go through the following TABs
Taxation Details (Very important)
Background Information for Awards and Pay Types
Each time an employee is paid their pay envelope (for that pay) is completed. A pay envelope looks like the following
In this pay envelope we can see items such as 'Award Rate', 'Car Allowance' and 'Union Fees'. These are called 'Pay Types'.
Every employee in e-PayDay® must be linked to an award. It contains information on accrual entitlements and an hourly rate.
A Pay Type can reference the employee's award for how much accruals are to accrue and even the hourly rate. But it can also be set to work independently for these things.
So a questions arises: Do I set up just a few awards and a great many pay types, or the other way around ? The topics below aim to help you answer this question. Perhaps the best answer is that a tidy balance between the number of awards and pay types you set up is ideal.
AWARDS
Each employee has to be linked to an award in e-PayDay® . This can be the same award as someone else is linked to as well. Don't think of an e-PayDay® award in the same way as an Award in the "real world" meaning of the concept. For example, many employees on farms do not have an "official" Award. In e-PayDay® an award is a set of conditions and entitlements that an employee is working under.
Accrual Entitlements
e-PayDay® gives you the opportunity to pay employees independent of their Award anyway (ie pay types that don't reference the award the employee is linked to). Taking this into account, the core of an Award is the accrual entitlements e.g. how much sick leave is an employee entitled to in any given year ? Any employment condition that has unique accrual entitlements will need it's own award.
So does this mean that if, amongst the spread of jobs at your workplace, there were only 3 different accrual entitlements, that you would only need 3 awards ? Not necessarily.
Hourly Rate
An award also contains an hourly rate. If this was unique you could have an award for each as well. Some users have set an award up for each different hourly rate being used to pay their employees. If these employees have the same accrual entitlements then they could be linked to just the one award, and their unique hourly rate put into the "Special Award Rate" field of their employee details.
Awards vs Pay Types
Pay rates (along with allowances and deductions, generically called 'Pay Types') are used to pay employees, NOT Awards. If a pay rate has as it's value, a percentage, then it will reference the hourly rate associated with that employee. This could be in the employee's award or the 'Special Award Rate' field of their employee details. If a Pay Rate's value is a dollar value then the rate paid will be this dollar value, not the hourly rate associated with the employee. This resolves the conflict some of our users in the agricultural industry have, who employ shearers. e-PayDay® requires them to be linked to an Award, which just so happens to require an hourly rate. Most shearers get paid a dollar amount per sheep, NOT an hourly rate. In this case the shearer would be linked to an Award containing a token hourly rate but would be paid with a Pay Rate that had this (dollar) amount per sheep as it's value.
Award Hours
An Award also contains the number of hours worked in a week. For example, a full time employee who is paid fortnightly and works 70 hours over a fortnight, would have 35 in the "hours" field in their award, NOT 70.
Awards for Casual Employees
Hours: The hours in a casual award are to be set to a negative amount e.g. –38. This forces the user to enter the correct amount of hours during a payrun.
Superannuation: Casuals often have conditions attached to their superannuation entitlements. Given that superannuation tab 3 is to have the regulatory SGL %, usually starting after 0 weeks and calculated on a pay rate where applicable, these conditions are entered in super rules tab 4. Of course this tab also applies for any full time employees with conditions for superannuation.
You are given three awards by default. If these are not appropriate then edit them and change them to be inactive.
See Adding an Award
PAY TYPES
Pay Types is the generic term for Pay Rates, Allowances and Deductions. These are used to actually pay an employee. For example, an employee may work their usual 38 hours in a week, for which, they are paid at the "award rate". He or she may have also worked some overtime, paid at "time and a half". "Award rate" and "time and a half" are both Pay Rates.
e-PayDay® already gives you plenty of pay rates and a few sample allowances and deductions. Do NOT delete any any of the default pay rates as you may need them at a later stage. The sample allowances and deductions can be modified however.
Pay Rates
Value: If the value is a percentage then it will take as the value that percentage of the hourly rate associated with the employee (either in their award or 'special award rate' field in their employee details). If the value is a dollar amount then it will use that dollar amount as the rate.
Pay Rate Type: This defines how this pay rate is to be taxed. In all but exceptional circumstances the value of this field will be 'Ordinary Pay' for "normal hours" work, 'Other (Back Pay, Bonus, Commision etc) Taxed at Marginal Rate' for "other" types of work, or 'Overtime' for overtime hours.
Accruals: If a cross is placed in an accrual box down the bottom of the Pay Rate's details, this tells e-PayDay® to look at the employee's award for how much of that accrual to accrue. If, in that employee's award, the accrual entitlements are set to zero, then the accrual balances for the employee wont be touched. By the same token, if, in an employee's Award, they are set to have half the year off in Annual Leave, but they are being paid with a Pay Rate which doesn't have Annual Leave crossed, then they still won't get any holidays.
Superannuation: If a cross is present in the box next to "Superannuation" at the bottom of the Pay Rate's details, then e-PayDay® will look at the employee's award for how much super to "pay". If no cross is present, e-PayDay® will not even look at the award, and no super will be paid. This "rate of super" can also be set to a unique percentage just for a particular Pay Rate. In other words, e-PayDay® is not looking at the award for how much super to pay. Put this percentage in the appropriate box in the Pay Rate's details.
See Pay Rates
Allowances
There are two major decisions to be made when setting up an allowance.
1. Are the figures attributable to this allowance to be shown in the allowance box on employees' Payment Summaries ?
2. Is this allowance to be taxed or not ?
If the allowance's figures are NOT to be shown on Payment Summaries, then the 'Allowance Type' should NOT be "Show allowance separately in allowance box". Alternatively, the allowance's figures could be thrown in with the figures going into the Gross on the Payment Summary, or could be left off the Payment Summary all together.
See Allowances
Deductions
Deductions can be before tax or after. The deduction can be attributed to superannuation, a union, or neither. A cross next to "Superannuation" will attribute the deduction as such. Likewise for a cross next to "Union". Deduction Payee details should be entered in the Deduction Payee List Payee list. Deductions can be 'paid' and reports printed to keep track of deductions to pays.
See also Deductions, Paying Deductions, Deductions Report
SUPER MGR
This is where you set up any funds you or your employees elect for SGL monies to go to. The period start date usually is the start of the month in which you are to begin pays. From here you can print superannuation reports to send to your Superannuation Funds along with your cheques with the super contributions for your employees. You can also keep track of what has been paid by paying super.
See Superannuation Guarantee Levy
EMPLOYEE INFORMATION
This is where employees are added. Starting at Personal 1 tab, progress through the tabs in number order. When Pay Types and Cost Centres 6 tab is addressed then click on the 'More' button down the bottom hand left. This will take you to an additional set of tabs that need to be addressed.
The most important fields you will come across are 'Date Hired' (tab 2), 'Award #' (tab 2), 'Tax File Number' (tab 5) and 'Superannuation fund' (tab 1 via More button)